US Tariffs Cut India's Solar Module Exports by 35 Per Cent

India's solar module exports to the United States have fallen by approximately 35 per cent following steep tariffs imposed by the Trump administration, exposing the Indian solar industry's heavy dependence on a single export market, according to a report by Bengaluru-based think tank Climate Risk Horizons. Indian-made solar modules now face US duties of 126 per cent, sharply raising prices and triggering volatility across the sector.

From FY22 to FY24, India's photovoltaic module exports to the US rose nearly 10 times. The US historically accounted for approximately 95 per cent of India's solar module exports, despite India supplying only around 7 per cent of total US solar imports. Between August and September 2025, following the imposition of a blanket 50 per cent tariff, India's monthly solar exports fell from approximately $134 million to roughly $80 million. Module costs in the US rose by 31 per cent, compressing profit margins that typically range between 40-60 per cent in developed markets.

By the end of 2025, India had built approximately 144 GW of solar module manufacturing capacity, positioning it among the world's fastest-growing producers. The export slump risks leaving a portion of that capacity underutilised. The Climate Risk Horizons report warns that the tariff shock reflects the structural risk of concentrating exports in a single destination. India's solar industry requires market diversification into the European Union, which currently relies heavily on Chinese imports, while also developing domestic demand through enforced renewable purchase obligations for industry.

The report estimates that if India's top companies in cement, aluminium, steel and fertiliser sectors were to meet their 30 per cent renewable purchase obligation, that alone would generate approximately 19 billion units of annual renewable electricity demand, requiring around 10 GW of solar PV capacity. Scaling to 100 per cent renewable sourcing would require 50 GW. Climate Risk Horizons Director Ashish Fernandes argued that increasing domestic solar deployment would also reduce India's dependence on imported coal and, eventually, oil and gas, improving both energy security and foreign exchange conservation.

Key figure — 126 per cent US duty rate on Indian-made solar modules as of early 2026